The cost of health care – actual HIPPA premium costs

Yesterday I researched the existing cost of HIPAA health care policies in California. The Health Insurance Portability and Accountability Act (HIPAA), passed by Congress in 1996, was designed to assist people who had lost their health insurance annd needed insurance. HIPAA particularly aids those who have pre-existing conditions obtain coverage.

According to the U.S. Department of Labor web site:

HIPAA’s is a federal law that:

* Limits the ability of a new employer plan to exclude coverage for preexisting conditions;
* Provides additional opportunities to enroll in a group health plan if you lose other coverage or experience certain life events;
* Prohibits discrimination against employees and their dependent family members based on any health factors they may have,
including prior medical conditions, previous claims experience, and genetic information; and
* Guarantees that certain individuals will have access to, and can renew, individual health insurance policies.

HIPAA is complemented by state laws that, while similar to HIPAA, may offer more generous protections. You may want to contact your state insurance commissioner’s office to ask about the law where you live. A good place to start is the Web site of the National Association of Insurance Commissioners at http://www.naic.org.

One of the most important protections under HIPAA is that it helps those with preexisting conditions get health coverage. In the past, some employers’ group health plans limited, or even denied, coverage if a new employee had such a condition before enrolling in the plan. Under HIPAA, that is not allowed. If the plan generally provides coverage but denies benefits to you because you had a condition before your coverage began, then HIPAA applies.

Under HIPAA, a plan is allowed to look back only 6 months for a condition that was present before the start of coverage in a group health plan. Specifically, the law says that a preexisting condition exclusion can be imposed on a condition only if medical advice, diagnosis, care, or treatment was recommended or received during the 6 months prior to your enrollment date in the plan. As an example, you may have had arthritis for many years before you came to your current job. If you did not have medical advice, diagnosis, care, or treatment – recommended or received – in the 6 months before you enrolled in the plan, then the prior condition cannot be subject to a preexisting condition exclusion. If you did receive medical advice, diagnosis, care, or treatment within the past 6 months, then the plan may impose a preexisting condition exclusion for that condition (arthritis). In addition, HIPAA prohibits plans from applying a preexisting condition exclusion to pregnancy, genetic information, and certain children.

If you have a preexisting condition that can be excluded from your plan coverage, then there is a limit to the preexisting condition exclusion period that can be applied. HIPAA limits the preexisting condition exclusion period for most people to 12 months (18 months if you enroll late), although some plans may have a shorter time period or none at all. In addition, some people with a history of prior health coverage will be able to reduce the exclusion period even further using “creditable coverage.” Remember, a preexisting condition exclusion relates only to benefits for your (and your family’s) preexisting conditions. If you enroll, you will receive coverage for the plan’s other benefits during that time.

Although HIPAA adds protections and makes it easier to switch jobs without fear of losing health coverage for a preexisting condition, the law has limitations. For instance, HIPAA:

* Does not require that employers offer health coverage;
* Does not guarantee that any conditions you now have (or have had in the past) are covered by your new employer’s health
plan; and
* Does not prohibit an employer from imposing a preexisting condition exclusion period if you have been treated for a
condition during the past 6 months.

HIPAA policies, though, can only be purchased once COBRA has expired. Even so, HIPAA helps people who otherwise would be denied coverage due to a pre-existing condition. However, these policies are not inexpensive.

Looking at coverage for a single individual from Blue Cross, the monthly premium ranges from $371 for people 15 to 29 to $901 for people 60 to 64. These rates are approximately the median average of all the policies offered. Some have premium rates well over $1000/month while others were approximately $850/month for a single individual.

Obviously, rates for families with children are much higher, ranging from a minimum of just over $1100 to just over $1900 a month. All policies required a deductible over at least $1500 and most require a deductible of $2500…plus the usual variety of co-payments and limitations.

My guess is that few middle class American households can afford rates as high as these.

As industry regulations and federal laws exist right now, there is no incentive for the health insurance industry to provide lower cost insurance policies. Why would these companies lower costs, and thus profits, if they don’t have to?

Regardless of the rhetoric coming out of the far right about socialism, government take over of industry, etc., the cost of health care is bankrupting this country, destroying families, threatening our welfare, and killing businesses by making them uncompetitive.

Frankly, I would welcome a national plan that reduced costs by spreading it over a larger segment of the population (i.e. spreading the risk) and managed the administrative costs as efficiently as Medicare – which is significantly less than the insurance industry. Plus, the profit motive would be eliminated, automatically reducing costs to the average American.

All we need is for Congress to write and pass a bill that actually makes sense, solves the problem, and isn’t overloaded with needless (and often stupid) regulations. Will this happen? Who knows. There is too much financial incentive for members of Congress to give insurance companies a basket full of goodies.

In the meantime, more and more people are losing their insurance because they simply don’t have the available cash to pay for it. When health insurance costs are nearly as much or more than a house payment or rent, then something is terribly wrong. I hope people will wake up to reality, get over their ideology, and push for a logical and sensible reform bill.